These are only two aspects that contribute to the calculation of the cap rates. The cap rate should not only be determined by income, but also price


Your investment type will dictate the cap rate you select. Higher cap rates might be more appropriate for those who are seeking higher potential revenue and greater risk. If you're looking for something safer, a lower cap rate is an indication of that. As an illustration, a 20% junk-bond is no better than a 2 % T-bill. Both have their purpose, and it all depends on what your investment goals are. What is a good cap-rate for multifamily? Choose one that aligns with you goals and provides adequate risk reward!

what is a cap rate in real estate


A lower caprate often means higher appreciation potential, and safer investments. However, a lower cap rate can indicate greater appreciation potential and less risk.

what is a cap rate in real estate
rental property cap rate

rental property cap rate


Capitalization rate is a measure that tells investors how long it will take for them to make their investment back. Divide the NOI by your property's purchase price to calculate the cap rate.

cap rate in real estate


How do you know whether your real estate investments are a waste of time or profitable? It's very simple: Cap rate.

cap rate in real estate
what is a good cap rate?

what is a good cap rate?


A low capitalization rate usually doesn't generate a large monthly cash flow. It will appreciate over time, however.

average cap rate


Consider not only the cap rate, but also hold time and appreciation, as well as cash flow. All of these are valid criteria for investors to consider. This will help you to determine the capitalization rate that you desire and need.

average cap rate